Qatar, a suitable approach designed and based on the sports industry
Qatar aims to develop a true sports industry integrated with the economic globalization of sport. To exist through sport. The 2022 World Cup marks a change in its approach to sports.
Jean-Baptiste Guégan is a member of the Sport Business Observatory, consultant in Sport Geopolitics, teacher, author and lecturer. The article was written in collaboration with Mourad El Bouanani and Alexandre Buzenet
Whether in family or in geopolitics, when you are the last born, you have to double your creativity to “make room” for yourself. So Qatar chose sport, a sector that has shown several advantages: it is little invested by its regional neighbors and it is very media-friendly. The organization of international sporting events is therefore the guarantee of existence through sport, but where winning is not easy. The defeat of the “Maroons” against Ecuador is the perfect illustration of this. To succeed in fully self-imposing, Qatar has adopted a particularly financially ambitious investment strategy. Moreover, a strategy that is far from being limited to sport!
The Qatar Investment Authority, Qatar’s sovereign wealth fund, has mobilized many subsidiaries that have enabled it to weave a global spider’s web, both sectoral and geographical (Dumortier, 2012). For example, in 2006, Qatar Holding was created. It is responsible for acquiring assets in international industrial groups such as in Germany where it has become a major shareholder of the Volkswagen group and the German automotive industry as a whole. The same process is repeated for the real estate sector, where QIA entrusts the management of its investments to the Qatari Diar Real Estate Company, which develops many real estate projects around the world. We have recently seen it in Malaysia, Turkey, Morocco and Egypt, through its subsidiary “Barwa”. If of course the francophilia of the royal family does not explain everything, it also appears that France is an attractive territory with the acquisition of many stakes in our companies, be it Total, Accor or Vinci.
This strategy allowed Qatar to control certain sectors of activity and to optimize its revenues. Unlike Saudi Arabia, which “(…) favors bonds with the best-rated states in the world and likes North American pension funds”, QIA combines several sectors with high values such as aeronautics, automotive, technology, energy, water, media, finance, land, real estate and…sport.
Sport funding to weigh: the payer is the decision maker
In sport, participating, organizing and winning are not enough. International sport needs to be funded to make the most of it. Since the payer is the decision maker, QIA’s sports arm is entrusted to Qatar Sport Investment (QSI), its special subsidiary headed by the Emir’s right-hand man, Nasser Al Khelaifi (NAK). In 2011, “Sport Illustrated” named him the most influential personality in the sports industry. In the same year, he became Chairman and CEO of PSG and Chairman of the Paris Handball club, which affiliated with the PSG brand to become PSG Handball. President of ECA, the European club lobby and member of the UEFA board of directors, Nasser Al Khelaïfi is a man of networks. Essentially, he is one of the faces of Qatar abroad and its institutional entryism.
By purchasing Paris Saint-Germain, QSI did not limit itself to asset creation. He aims to turn the French capital into a sports and multi-sports beacon at the service of the emirate, its visibility and its diplomatic influence. The creation of BeIn Sport, a sporting offshoot of Al Jazeera, is also part of this logic of funding world sport to better understand it and promote Qatari interests. Since 2014, BeIN Media Group has continued to grow and scale. Holding the rights to more than sixty sports competitions from the NBA to the Champions League, it is now present in 43 countries worldwide and has more than 55 million subscribers worldwide as of 2020.
But Qatar does not stop there. It aims to build a true sports industry integrated into the economic globalization of sport, and that, it builds around high visibility assets. A behavior that seems “rational” because it motivates the logic of income differentiation at different levels and integration in the value chains of entertainment sport (social media, sponsorship contracts, sports information , picture).
On this last point, QIA’s investments in the transfer market witness a new commitment to the economic and sporting development of the international franchise that is PSG. The payment in 2017 of the clause of the Brazilian footballer Neymar (222 million euros) and the purchase option of the French Kylian Mbappe (180 million), the renewal of their contracts or the signing of Lionel Messi prove this. PSG became the 7th club in the world for a valuation exceeding 3 billion euros (Forbes) in a decade. The second strongest development of a sports franchise in the world behind the Golden State Warriors, the basketball team of San Francisco, NBA champion in the title.
An effective sports diplomacy but it is not without limits
Qatar’s sports diplomacy is therefore by no means embryonic. According to geographer Mehdi Lazar, it is the geo-historical, geo-economic and geopolitical characteristics that led Qatar to shape such a unique diplomacy. Because Qatari sporting affirmation is not limited to the sole desire to prepare for the post-oil era.
Its ambition is to make the emirate exist in collective representations and shape them to its advantage. A tool of distinction across the Gulf States, Qatar’s sports activism is also an element of nation building, national unity and solidarity. This opens the way to a broader reconstruction of identity on which the ruling dynasty, the Al Thânî, clearly sought to draw. A need for a young state that has been independent since September 1971 and faces historical threats of a complex regional space.
But while this kind of progress is certainly dazzling, many weaknesses and contradictions remain. Sport does not erase reality. The action of NGOs such as Amnesty International and the work of journalists Quentin Muller and Sébastien Castelier, The slaves of oilspecifically shed critical light on the precariousness and living conditions of the thousands of workers who built Doha over a decade and made the 2022 World Cup possible.
Admittedly irresistible, the real gains of Qatari sports diplomacy can very quickly become uncertain. Qatari representations found themselves trapped in an unarticulated and contradictory strategy. The French example is eloquent between calls for boycotts, participation and repeated criticism. The business of seduction does not produce the expected effect. Far from it. Far from the expected narrative with controversies around labor law and specifically discrimination, the narrative of work on the occasion of the 2022 World Cup serves the interests of the State it is supposed to promote.
One can also wonder about the uncertain future of geopolitical developments in the Gulf that could burden and weaken the Qatari kingdom. Geographer Brigitte Dumortier explains how the climate of regional tension could undermine the strategic vulnerabilities of this micro-state in Qatar’s ambitions. The 2017 blockade and the threat of overthrowing the ruling dynasty showed this. The question of the diversification of the Qatari economy and the sustainability of such a model in times of climate change should also be raised.
The 2022 World Cup certainly marks a shift in Qatar’s sports strategy. Scrutinized by the whole world, Qatar plays a lot in this event. The culmination of a policy that began more than a decade ago, football’s biggest selection competition is not without risks. Exposure and the quest for visibility come at a price. Facing reality. Sportingly, it seems difficult to imagine Qatari success, on a diplomatic level, this World Cup has changed the nature of relations with its big neighbor, Saudi Arabia. See you in December 2022 the day after the final for the first assessment. It’s a safe bet that there is no shortage of lessons!